e318c71 created the issue

What I did:

I right-clicked on a folder named "Somefolder" in an SFTP session. I chose "New Folder", and created a folder named "Test".

What I expected:

I expected the folder to be created in the "Somefolder" folder.

What I got instead:

The folder got created at toplevel, i.e. in the current work directory, instead of "Somefolder".